Tesla's value seriously down

AUTHOR:M.J. GDNUS

The value of Tesla, the company of billionaire Elon Musk, now Donald Trump's key man for saving the US federal government, has fallen by 37 percent since Trump took office as US president, and sales of the brand's electric vehicles are also falling.

The business results cover the period from Trump's inauguration on January 20 to last Friday, February 28, and the loss amounts to $ 550 billion.

Musk's entry into right-wing politics is seen by some experts as a reason for deterring potential customers who do not share his worldview.

"It's the basics of marketing: stay out of politics. People will stop buying your products," says New York brand consultant Robert Pasikoff.

According to research by Jato Dynamics, Tesla's electric vehicle sales in Europe fell 45 percent in January after falling sales in California, the brand's biggest U.S. market and in electric vehicles in general.

Tesla lost money last year and around the world.

Auto industry analysts say it's too early to say how much damage Musk is doing to Tesla because there are other factors: customers waiting for a new version of the Ypsilon model, Tesla's best-selling car, this year, and the fact that Chinese and European electric vehicle manufacturers are becoming serious competitors to Musk's company's products.

This situation makes Musk's political comments seem even more irresponsible, auto industry analysts say.

"Musk thinks he can say whatever he wants and doesn't think Tesla will suffer the consequences for it," said Morningstar analyst Seth Goldstein. "Tesla is very exposed. And now it has competition."

The January sales decline was particularly large in Germany and France, down 60 percent each. In France, sales fell another 26 percent in February. The average decline in more than 25 European countries is 45 percent.

Tesla’s Model 3 is down 33 percent in all European countries, even though it is not expected to be upgraded, so there is no reason for buyers to wait for a new version.

Felipe Menez, a senior analyst at Jato, says: “A part of the population does not approve of Musk’s views, his political activism.”

Many Tesla car buyers have been wealthy, environmentally conscious professionals, often liberals, who were attracted by Musk’s speeches about how his electric vehicles would help save the planet from fossil fuel destruction. That is changing.

“The left used to love me. These days, they love me less,” Musk said on February 18.

His decision to donate $270 million to Donald Trump’s presidential campaign and publicly endorse him was already risky enough for his business. Then he added his slash-and-burn strategy as head of Trump’s federal government efficiency team, his advocacy of a “political revolution,” and his inflammatory rhetoric toward many outside the United States.

He has supported the far-right, pro-Russian, anti-Muslim Alternative for Germany party, which came in second place in the recent election with 20 percent of the vote, called British Prime Minister Keir Starmer an “evil tyrant” who runs a “police state,” and recently called Canada, the U.S. neighbor and a key market for Tesla vehicles, “not a real country.” And all of this has led to fierce retaliation.

Tesla showrooms in the United States are being besieged by protesters, cars are being vandalized, and stickers are being placed on them that say, “I bought this before Elon went completely crazy.”

A puppet with a Nazi salute and Musk’s face was hung in Milan because Musk himself had recently done so, sparking an avalanche of condemnation. The image was also projected over his factory near Berlin. In the UK, there are posters at bus stops that call his cars “swastika cars.” A Polish government minister has called for a boycott of Tesla.

Tesla investor Ross Gerber said Musk had managed to “pair the world’s best product with the world’s worst marketing.”

Morningstar analyst Goldstein says Tesla cars are too expensive anyway for a boycott to make sense.

There are Tesla buyers who won’t give them up and believe Musk is a visionary who is changing the way people think about transportation and the future of the planet.

But if the stock market is any indication, Tesla’s position is deteriorating, and Musk’s presence in the Trump administration is not helping matters.